The content on this page and other DBCDE document archive pages is provided to assist research and may contain references to activities or policies that have no current application. See the full archive disclaimer.

Section 2 - Performance review

This section reports on the Department's performance in implementing its three programs against the success measures published in the Department's 2009-10 Portfolio Budget Statements and Portfolio Additional Estimates Statements and in managing its finances. We also measure performance against the service standards set out in our Service Charter.

The three programs are:

• Broadband and Communications Infrastructure (referred to as 'Infrastructure' in this report)
• Telecommunications, Online and Postal Services (referred to as 'Digital Economy and Services' in this report)
• Broadcasting and Digital Television (known as 'Broadcasting and Digital Switchover' in this report).

The contribution of risk management to achieving the department's objectives is covered in the Management and Accountability section of this report.

Client satisfaction

Each year, the Department conducts a client service survey to assess the level of client satisfaction against each of the standards outlined in our Service Charter. Clients are able to provide feedback on our performance across a range of areas, outlined in Table 2.1.

The 2010 survey achieved a response rate of 51.9 per cent, compared with a 48.7 per cent response rate in 2009. Overall, the survey results showed that 95 per cent of respondents rated the Department's overall service as satisfactory or better and 74 per cent of clients rated our overall service as good to excellent.

Table 2.1 outlines trends in our performance over three years against the standards in the Service Charter. Over the previous three years, the client service survey has demonstrated improvements in our website, the development and review of policy and legislation and administration of funding programs. We have maintained over 90 per cent satisfaction rates in areas such as telephone and email dealings with clients, communication with our clients, provision of services and overall customer service.

Table 2.1 Outcomes of the 2008, 2009 and 2010 Client Service Satisfaction Surveys—overall results (rated performance as satisfactory to excellent percentage)

In the coming year, we will focus on the areas of administration of funding programs, our website, consultation processes in relation to policy and legislation and increasing awareness of our Service Charter.

Back to top

Infrastructure

The Infrastructure Group supports efficient investment in fast and reliable broadband and communications infrastructure across Australia by:

• implementing the National Broadband Network initiative
• providing strategic advice on reform of current infrastructure regulation to make it work more effectively, particularly during the rollout of the National Broadband Network
• supporting efficient management and allocation of radio frequency spectrum (including re-allocation of spectrum to the highest value use by the community, where appropriate)
• developing policy advice to address changing consumer and industry demand for spectrum
• working with other agencies and industry to protect Australia's critical infrastructure.

National Broadband Network

In 2009-10, the Department made significant progress in the Australian Government's objective to deliver the National Broadband Network to all Australians. The National Broadband Network is planned to provide vastly improved services, drive productivity improvements and enhance competition in the telecommunications sector.

A key milestone in the reporting year was the completion of the National Broadband Network Implementation Study. We delivered the Implementation Study to the Government on 5 March 2010 and it was publicly released on 6 May 2010. The Department commissioned McKinsey & Co and KPMG as lead adviser in the Implementation Study.

The Implementation Study covered a range of matters including technology, financing, ownership, policy framework and market structure of this infrastructure project. It entailed seven months of detailed work, including consultation with over 140 industry stakeholders. A steering committee of APS agencies and NBN Co, led by this Department, worked with the lead adviser to produce the Study. The report contained 84 recommendations and more than 500 pages of explanation and supporting analysis. The Implementation Study concluded that the National Broadband Network was achievable and viable.

Following the Study's public release, we managed a three week public consultation process. This has informed our advice to the Government on its response to the Implementation Study and NBN Co in developing its business plan and network architecture.

Supporting legislation

On 19 August 2009, the Australian Government introduced the Telecommunications Legislation Amendment (National Broadband Network Measures—Network Information) Bill 2009 into the Parliament. The objective of the Bill is to facilitate access to network information held by carriers and utility companies, which may be needed to support the National Broadband Network rollout. The Bill is currently awaiting debate in the Senate.

As part of the National Broadband Network initiative, the Government is committed to ensuring that an appropriate and effective telecommunications regulatory framework is in place, including during the transition to the National Broadband Network.

The Department advised and assisted the Government in developing a package of reforms to the existing telecommunications regulatory regime, which culminated in the Government introducing the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 in Parliament on 15 September 2009. The Bill was passed by the House of Representatives on 22 October 2009 and was introduced in the Senate on 26 October 2009.

A major objective of the reforms was to address Telstra's level of integration, while also providing it with the flexibility to choose its future path. The Bill was structured to: address Telstra's incentives to discriminate against its wholesale customers by requiring Telstra to functionally separate, unless it voluntarily structurally separates; and prevent Telstra from acquiring new spectrum used for advanced wireless broadband services while it continues to dominate across the major copper, cable and mobile telecommunications platforms. These reforms address long-standing and widespread concerns that the existing telecommunications market structure is failing consumers, businesses and the economy in general.

On 24 February 2010, the Minister issued exposure drafts of:

• The National Broadband Network Companies Bill 2010—covering NBN Co's wholesale-only obligation, ownership, reporting and governance arrangements.
• The Telecommunications Legislation Amendment (National Broadband Network Measures—Access Arrangements) Bill 2010—covering NBN Co's access arrangements, including transparency and non-discrimination requirements.

Appointment of directors to NBN Co

In 2009–10, nine permanent directors were appointed to NBN Co, the company established to rollout and operate the National Broadband Network. They are: Mr Harrison Young, Mr Mike Quigley, Mr Doug Campbell AM, Mr Peter Hay, Ms Siobhan McKenna, Ms Diane Smith-Gander, Mr Gene Tilbrook, Mr Clem Doherty and Mr Terrence Francis. The directors appointed have diverse backgrounds, strong skills and relevant experience. The Remuneration Tribunal set the remuneration of the directors.

National information campaign

The Department implemented a national information campaign to inform Australians about the uses and benefits of high speed broadband. This campaign commenced in June 2010 using television and print advertising, supported by a website with more detailed information. A series of community forums also forms part of the campaign.

Community forums

In 2009–10, the Department held a series of community forums to inform local government, businesses and householders about the opportunities presented by high speed broadband and to increase awareness of the National Broadband Network. Forums were hosted in Perth, Western Australia; Toowoomba, Queensland; Smithton, Tasmania; Ballarat, Victoria; and Broken Hill, New South Wales.

Fibre in new developments

Following extensive consultation and consideration of the Implementation Study recommendations, on 20 June 2010 the Government announced that from 1 January 2011, NBN Co will act as the wholesale provider of last resort in new developments constructed within, or adjacent to, NBN Co's long-term fibre footprint. The Government also introduced the Telecommunications Legislation Amendment (Fibre Deployment) Bill 2010 into Parliament on 18 March 2010. The Bill provides a framework for the installation of fibre optic infrastructure in new developments.

Rollout of services in Tasmania

The Australian Government established a wholly-owned subsidiary of NBN Co Ltd, NBN Tasmania Ltd, and appointed Mr Doug Campbell AM as Executive Chair.

The Government announced three rollout stages during the reporting period. These were:

• Stage 1: Smithton, Scottsdale and Midway Point with the first services to these communities by July 2010.
• Stage 2: Sorell, Deloraine, George Town, St Helens, Triabunna, Kingston Beach and South Hobart.
• Stage 3: 40 000 premises in Hobart, 30 000 premises in Launceston, and 10 000 premises each in Devonport and Burnie.

Regional Backbone Blackspots Program (RBBP)

The Department issued a Request for Tender in July 2009 for the RBBP to build, operate and maintain fibre optic backbone infrastructure in six priority regional locations, designed to address the monopoly backhaul impediments to market efficiency. The Department concluded tender evaluations and contract negotiations and the Australian Government announced Nextgen Networks as the successful tenderer in early December 2009.

When complete, the network will deliver approximately 6000 km of new optical fibre backbone with more than 100 service-ready network access points, benefiting 400 000 consumers in regional Australia. The Department is monitoring the progress of construction which is on schedule, with the deployment of more than 1100 km of optical fibre backbone as at 30 June 2010.

In 2009–10, administered capital expenditure incurred by the program was $44.5 million.

Rural National Broadband Network Coordinators

On 6 May 2010, the Department commenced a recruitment process for Rural National Broadband Network Coordinators to increase awareness and take-up of opportunities enabled by new backbone infrastructure funded under the RBBP. The Coordinators will work to ensure the benefits of this infrastructure investment support regional communities, businesses and local governments. The Department met expenses including the set up of this program in 2009–10.

Spectrum policy

Access to radiofrequency spectrum is critical to the provision of communications services which play a central role in everyday life. These include broadcast services, mobile telephony and wireless broadband. These services are an integral part of social and business activity. The rapidly increasing demand for finite spectrum resources for more wireless services, broadcast space and increased mobility places pressure on incumbent users and raises policy issues of industry and consumer access.

On 24 June 2010, the Minister announced the Australian Government's decision to release 126 MHz of contiguous spectrum in the upper ultra-high frequency (UHF) band, comprising the frequency range 694 to 820 MHz inclusive. The Government's decision was made following consultation through the Digital Dividend Green Paper, which was issued on 5 January 2010. The Green Paper indicated the broad principles the Government used in consideration of the digital dividend, including the recognition that there may be some trade-offs between efficiency on the one hand, and the level of disruption to current spectrum users on the other. Over 100 submissions to the Green Paper were received.

On 3 March 2010, the Government announced a separate process for the re-issue of certain 15-year spectrum licences which expire between 2013 and 2017. These licences are used primarily to deliver 2G and 3G mobile phone and wireless broadband services to millions of Australian consumers. The Government is considering their renewal in accordance with the Radiocommunications Act 1992. The Department has commenced information-gathering discussions with a number of licence holders to inform decisions on possible spectrum licence renewal.

The Radiocommunications Legislation Amendment Bill 2010 was introduced in the House of Representatives on 16 June 2010. This Bill will allow for greater efficiencies in spectrum use through the introduction of coexistence of class and spectrum licences; and removes the two year time limit for the ACMA to initiate spectrum licence reissue.

The Department also administers Australia's membership of the International Telecommunication Union (ITU) and the associated member state contribution as part of Australia's international efforts to encourage efficient use of spectrum resources and to promote effective global telecommunications standards.

The Department participated in the World Telecommunication Development Conference in Hyderabad, India, from 24 May to 4 June 2010 which determined the work priorities for the ITU Development sector for the next four-year period (2011-2014), addressing cyber security, internet governance and accessibility for persons with disabilities, climate change and emergency communications.

Infrastructure security

During 2009-10, the Department provided secretariat and program support to three communications and information technology security groups under the Trusted Information Sharing Network, a collaboration between government and industry for the resilience of critical infrastructure.

Key achievements included:

• developing a Strategic Statement, adopted in June 2010, for the communications sector highlighting benefits of participation and key focus areas
• producing two new and three revised IT security advisory papers for critical infrastructure owners and operators
• facilitating the communications sector's participation in national exercises and research activities
• assisting owners and operators of industrial control systems to attend international cyber security training
• facilitating good practice guidance for industrial control systems operators.

Internet governance

The Department represents Australia on the Governmental Advisory Committee (GAC) of the Internet Corporation for Assigned Names and Numbers (ICANN). ICANN is the international, not-for-profit corporation responsible for the naming and numbering systems that underpin the efficient operation of the internet. Over 2009-10, we have been a key player in the GAC.

Key achievements included:

• The introduction of safeguards within ICANN's new generic Top Level Domain process to protect the legitimate interests of business and consumers (such as measures to better protect rights holders and to prevent consumer confusion and malicious conduct).
• Significant progress with measures to improve coordination between law enforcement agencies and ICANN-accredited registrars and to address concerns about criminal misuse of the domain name system.
• The introduction of internationalised top level domain names into the domain name system (such as  for China).
• The Department also liaises with the .au Domain Administration (auDA), which is the independent, not-for-profit administrator of the '.au' domain name space. As part of this role, the Department is an observer on auDA's Board of Directors.

Back to top

Digital economy and services

The Digital Economy and Services Group assists Australians to make best use of broadband and communications infrastructure through:

• promoting use of the digital economy to Australian businesses, public sector service providers and individuals
• improving communication services for those living and working in regional, rural and remote Australia
• supporting more innovative delivery of online services, via the National Information and Communication Technology Centre of Excellence and the Clever Networks and the Digital Regions programs
• protecting the interests of consumers via the Australian Communications Consumer Action Network (ACCAN); the Government's Cyber-Safety Plan and cyber security awareness initiatives; and strategic change in the postal service, including in terms of its role in the digital economy.

Promoting the digital economy

The Australian Government defines the 'digital economy' as the global network of economic and social activities that are enabled by platforms such as the internet, mobile and sensor networks. The digital economy is accessed through familiar devices such as computers, phones and game consoles. It includes such things as the web searches that we do to find information, electronic banking and online maps that we consult.

A successful digital economy is essential for Australia's economic growth and improved productivity, as well as for the way we interact socially. It offers new opportunities for businesses to access a larger, potentially global, market and for individuals to connect and collaborate.

The Department prepared a paper titled Australia's Digital Economy: Future Directions, which outlined a vision for the digital economy and a framework for maximising Australia's online participation including roles for government, industry and the community. The paper also announced that the Government would host a forum to assist Australia's research community and commercial sector to map the applications and business models which will thrive in our high speed future.

On 10 and 11 December 2009, representatives of the Australian research community and commercial sector participated in the Realising Our Broadband Future forum. Discussion at the forum and online tools used were divided into five streams: e-Health, Digital Education, e-Business, Smart Infrastructure and e-Communities. The ideas generated at the forum are part of a broader policy process to develop Australia's National Broadband Network-enabled digital economy.

Consumer and business engagement in the digital economy

Australian households and businesses continue to adopt the internet and broadband both at home and in business. In 2008-09, approximately 78 per cent of Australian households had a computer and, of those, 92 per cent were connected to the internet (that is 72 per cent of all households). Of the 72 per cent with internet (refer to Figure 2.1), close to 86 per cent had broadband (that is 62 per cent of all households). This compares to 29 per cent with broadband (that is 16 per cent of all households) in 2004–05, and illustrates the rapid take-up of broadband by Australians.

Figure 2.1 Household take-up of computers, internet and broadband 1999 to 2008–09

Notes: Broadband data was not collected prior to 2004–05. Broadband refers to an 'always on' internet connection with an access speed equal to or greater than 256 kilobits per second.
Source: ABS Household Use of Information Technology 2008–09 (Cat. No 8146.0), issued 16 December 2009

Figure 2.1 Household take-up of computers, internet and broadband 1999 to 2008–09 - text version

Businesses experienced an even greater take-up of the internet and broadband. Figure 2.2 below demonstrates that in 2008–09, 91 per cent of businesses had internet access and 98 per cent of these (that is 89 per cent of all businesses) had broadband. The data also suggests there is significant potential for business—particularly small business—to further engage with the digital economy. Of all businesses using the internet in 2008–09, only 42 per cent had a web presence, and only 27 per cent took orders online. [1]

Figure 2.2 Business use of internet, broadband and e-Commerce 2002–03 to 2008–09

Source: ABS, 8166.0 – Summary of IT Use and Innovation in Australian Business, 2008–09, released 24 June 2010 [2]

Figure 2.2 Business use of internet, broadband and eCommerce 2002–03 to 2008–09 - text version

The Organisation for Economic Co-operation and Development's (OECD) comparative statistics indicate Australia was 17th in terms of broadband penetration as of December 2009.[3] In October 2009, the OECD ranked Australian broadband prices[4] as being overall fifth most expensive out of the OECD group of 30 countries for average broadband monthly subscriptions, including third most expensive for very low speed connections[5] and 11th most expensive for medium speed connections.[6]

The OECD is encouraging member states to develop a deeper understanding about the progress of the digital economy, including by collecting more comprehensive internationally compatible data. As a result, we have taken a leadership role with the Australian Bureau of Statistics, other government agencies and the states and territories, to expand and improve the information available.

Improving services in regional, rural and remote Australia

The Department is improving services to regional, rural and remote Australia, and continuing to implement the Australian Government's response to the Regional Telecommunications Independent Review. In 2009-10, we administered the following programs:

• Indigenous Communications Program (ICP)
• Satellite Phone Subsidy Scheme
• Australian Broadband Guarantee
• Digital Regions Initiative

Indigenous Communications Program

The objective of the Indigenous Communications Program is to improve access to telecommunications for Australians living in remote Indigenous communities, so that they are able to take full advantage of the economic, educational, social and cultural opportunities offered by the digital economy. As part of the Government's response to the recommendations of the Regional Telecommunications Independent Review Committee, the program refocused and enhanced the previous Backing Indigenous Ability Program and commenced on 1 July 2009.

The Program has two elements:

• The Community Phones element provides funding to install and maintain community phones in remote Indigenous communities and provides satellite handsets where appropriate. It aims to provide up to an additional 320 community phones in small, remote Indigenous communities throughout Australia.
• The Internet Access and Training element provides funding to improve access in remote Indigenous communities to public internet facilities and computer training, in partnership with the State and Northern Territory Governments.

Funding for the Community Phones element is administered by the Department. Funding for the Internet Access and Training element is appropriated to Treasury.

Community phones element

For 2009-10, $5.9 million in administered expenses were incurred.

Key outcomes of the program were:

• 237 existing fixed phones and 24 mobile satellite handsets were maintained and monitored.
• 63 additional fixed community phones (51 were fixed satellite phones) and 25 mobile satellite handsets were provided, maintained and monitored.
• Across all Indigenous community phones, the average time the community phones were fault free was 93.25 per cent.
• Six organisations were engaged to act as Community Liaison Officers to identify, consult and nominate eligible communities in need of a community phone.

Internet access and training element

The Internet Access and Training element of the Indigenous Communications Program is being implemented in collaboration with State and Territory Governments under a National Partnership Agreement. On 2 July 2009, the Council of Australian Governments (COAG) agreed to the National Partnership Agreement entitled Closing the Gap: the National Partnership Agreement on Remote Indigenous Public Internet Access. It was signed by the participating jurisdictions of New South Wales, Northern Territory, Queensland, South Australia, Tasmania and Western Australia.

Under the National Partnership Agreement, the Commonwealth and each participating State and Territory agree on annual implementation plans. These plans determine the communities to which services will be provided in each financial year. They also establish performance requirements for the delivery of public internet access facilities and computer and internet training. In 2009-10, five of the six participating jurisdictions (NSW, NT, SA, QLD and WA) agreed on implementation plans with the Commonwealth.[7] Following consultation with communities, Tasmania did not submit an implementation plan for 2009–10.

During 2009-10, the program improved the availability of public internet access facilities in 12 remote Indigenous communities, which have a total population of over 4600 people. Of these, seven communities previously had no public internet access facilities. Residents in these communities now have regular access to the internet, free of charge, via fixed personal computers in a community building. Training in how to access and use the internet was provided in 30 communities to 329 people. Participating jurisdictions expect to complete outputs agreed under 2009-10 implementation plans during the first quarter of the 2010-11 financial year. This is expected to provide a further 34 remote Indigenous communities with improved public internet access facilities and 12 communities with internet training.

For 2009-10, the program incurred administered expenses of $600 000.

Satellite Phone Subsidy Scheme

For around 75 per cent of Australia's land mass, the only commercially viable option for mobile phone services is via satellite. Satellite mobile phone services are available from a number of providers.

The Satellite Phone Subsidy Scheme (the Scheme) improves the affordability of mobile communications for people living and working in areas without terrestrial mobile coverage, by providing subsidies for the purchase of satellite phone handsets. The Scheme has been in place since 2002.

For 2009–10, the Scheme incurred administered expenses of $1.3 million. During 2009, the Scheme was extended and enhanced as part of the Government's response to the Regional Telecommunications Review. The enhancements included:

• an increase in the subsidy level from 60 per cent of the handset cost to 85 per cent
• better access for health and emergency service organisations to subsidies and additional handsets under the Scheme.

2009–10 saw the demand for subsidies increase marginally with 1578 subsidies provided during the year compared with 1401 in 2008–09. Competition in the satellite handset market has led to a reduction in handset costs. This has resulted in a reduction in the average subsidy paid.

These lower than average subsidy payments resulting from changes in the satellite phone market, together with increased demand for the purchase and installation of community phones in remote Indigenous communities, prompted a transfer of funds from the Scheme to the Indigenous Communications Program.

During 2009–10, we undertook a range of activities to raise awareness about the Scheme. These aimed to remind people of the existence of the Scheme, promote the enhanced subsidy arrangements and provide information that would be of particular use to those in bushfire prone areas of Australia. These activities included placing press, radio and billboard advertisements, in addition to promoting the Scheme at travel and trade shows.

Australian Broadband Guarantee

The Australian Broadband Guarantee program provides reasonably priced broadband services to all Australian households that are unable to access metro-comparable broadband services on commercial terms.

In 2009–10, the following threshold service was required to be offered by registered providers:

• Access to the internet at a peak download/upload data speed of at least 512/128 kbps[8] and at least 3GB per month usage allowance (with no restrictions within these limits on downloads or uploads or on usage time or peak/off peak limitations).
• A price to the customer over three years of no more that $2500 (GST inclusive) including equipment, installation, connection, account establishment and ongoing provision of service.

Of the 31 038 connections subsidised in 2009–10, 29 445 or 95 per cent, were satellite connections to areas where there were no terrestrial wireless services available under the Program. To enable equitable broadband access, the Australian Broadband Guarantee provides incentive payments of up to $2500 for standard installations and up to $6000 for installations in very remote and difficult to serve areas.

New standards apply to the Australian Broadband Guarantee for the 2010–11 program. These include doubling the speed and data allowance for the threshold service, tighter monitoring of data speed and performance, and greater consumer protection measures, with a three-year warranty on all new equipment.

Special arrangements apply to wireless providers who were registered under the Australian Broadband Guarantee program in 2008–10 and were still registered on 30 June 2010. They continue to receive the subsidy within pre-existing service areas and for pre-existing eligible premises, in recognition of their significant investment in infrastructure.

For 2009-10, the program incurred administered expenses of $77.8 million.

Online and Communications Council

The Online and Communications Council comprises the Minister for Broadband, Communications and the Digital Economy, the Minister for Finance and Deregulation, a relevant Minister from each State and Territory Government and the President of the Australian Local Government Association.

At its 17th meeting on 12 November 2009, the Council strongly endorsed the concept and implementation of the National Broadband Network to benefit all Australians. Members made a commitment to the development of comprehensive and reliable data sets to assist planning and tracking progress of the digital economy including the impact of the National Broadband Network at regional, state and national levels.

The Council also committed to the Framework for the provision of communications services to Indigenous communities to address communications issues in Indigenous communities.

The Framework for the provision of communications services to Indigenous communities supports a COAG commitment, the National Partnership Agreement, established on 2 July 2009, with the task of 'Closing the Gap' in Indigenous disadvantage.

Supporting innovative delivery of online service

National ICT Australia Limited (NICTA)

The ICT Centre of Excellence Program funds NICTA, which is a major ICT research, training and commercialisation institution. It involves the cooperation of four state and territory governments and seven universities.

For 2009–10, a total of $50.9 million, of which $25.4 million was provided by the Department and $25.4 million was provided by the Australian Research Council (ARC), to support NICTA's outcomes, which included:

• major new international research collaborations with organisations such as the Fraunhofer Institute for Experimental Software Engineering (Germany) and the Institute for Infocomm Research (Singapore)
• the establishment of an e-Government technology cluster
• further spin-out activity through the establishment of Cohesive Data to commercialise data compression technology particularly suitable for mobile devices and networks.

The level of commercial revenue generated by the ICT Centre of Excellence in the 2009 calendar year was $2.9 million.

NICTA has five research laboratories (two in Sydney and one each in Melbourne, Canberra and Brisbane) with around 600 research staff, professional staff and students (FTE) working on more than 15 major research projects and associated commercialisation. As at 31 December 2009, there were 234 PhD candidates sponsored by NICTA and 53 new jobs generated as a result of NICTA's spin out activities.

Following the outcomes of a program review in 2008–09, the Department and the ARC worked with NICTA in 2009–10 to:

• improve value-for-money
• encourage continuous improvement
• improve organisational arrangements
• enhance engagement with key stakeholders such as university partners.

These reforms form part of the conditions for NICTA's new funding of $185.5 million for the period from 2011–12 to 2014–15.

Clever Networks

The four year Clever Networks program concluded on 30 June 2010, having achieved its objective of improving services in regional, rural and remote communities. For 2009–10, the program incurred administered expenses of $18.7 million.

Clever Networks funded 52 projects in the following areas.

Health and emergency services

• A fully-featured online community with a membership base exceeding 28 000 members and bedside access at 25 hospitals nationwide for young people living with a serious illness, chronic health condition or disability.
• Broadband and innovative digital tools are now being used in 44 healthcare services in remote areas of Queensland to diagnose and treat patients.
• Forty video conferencing units across the Grampians region of Victoria are now in place allowing patients in the area to have direct access to emergency and maternity health care specialists located in other parts of the state.
• Picture archiving and communications and radiology information systems have been provided at 58 locations using upgraded broadband at 104 sites in four Area Health Services in NSW. A further 105 sites now have Mediview cameras installed.
• Eight virtual trauma and critical care unit rooms in the Loddon Mallee region of Victoria have technology installed to enable links between regional hospitals and major Melbourne metropolitan hospitals.
• Wide area network upgrades have been provided to 75 hospitals and health clinics in regional and remote Western Australia.
• Remote communities in the Northern Territory are now connected to 21 clinical health systems using a satellite network.
• More than 170 governmental, private and volunteer emergency services communication systems have been upgraded in Western Australia allowing emergency services personnel to coordinate response quicker.

Education

• A secure network of internet tools and online content has been made available to 2200 schools, 848 000 students and 50 000 teachers in Victoria with the development of 'FUSE' (Find, Use, and Share quality Education resources).
• Education services are now being delivered to 176 remote communities or homesteads in the Northern Territory via a satellite network.
• 'The Learning Place' provided 104 schools in Queensland with a new suite of online education resources, courses, tools and a Web 2.0 new generation internet environment.
• Students and teachers in 125 independent schools across Victoria are now connected by an advanced educational network.
• Technology hardware and software upgrades have been provided to 87 regional and remote schools in Western Australia.

Figure 2.3 Community reach of the Clever Networks program innovative service delivery projects

Figure 2.3 Community reach of the Clever Networks program innovative service delivery projects - text version

Digital Regions Initiative

The Digital Regions Initiative will co-fund digital enablement applications to improve services in the key sectors of health, education and emergency services in regional, rural and remote communities across Australia in partnership with state, territory and local governments. 

The four year $60 million Digital Regions Initiative will make grants available over two competitive funding rounds. Round One closed on 14 October 2009 and 49 applications were received. A second round of the program was announced on 18 May 2010.

On 11 December 2009, the former Prime Minister, the Hon. Kevin Rudd MP announced seven successful Digital Regions Initiative projects funded under Round One. An additional four successful projects were announced by the Minister for Broadband, Communications and the Digital Economy on 11 January 2010. Total funding allocated in the first round was $32.9 million. These projects are expected to commence in mid 2010. The eleven projects announced under the first round of the initiative are expected to achieve improvements across all states and territories.

Certification of payments to states and territories for projects funded under the National Partnership Agreement for the Digital Regions Initiative was $2.3 million for 2009–10.

Consumer representation and protection

While online services and associated technologies have been of enormous benefit to Australians, they have also raised new issues of concern. These include:

• a rising level of complaints to the Telecommunications Industry Ombudsman (TIO), reflecting both unsatisfactory services to consumers as well as incomplete consumer understanding of the details of the services they may have (sometimes inadvertently) contracted to purchase
• cyber-safety risks to children such as cyber-bullying, 'grooming' of children, breaches of privacy, exposure to inappropriate content and internet addiction
• cyber security risks to home users and small businesses.

Consumer complaints and resolving consumer issues

In its 2008–09 Annual Report, the TIO reported a 53.6 per cent increase in consumer complaints from 149 742 in 2007–08 to 230 065 in 2008–09. Their annual report also noted that in 2008–09, mobile complaints took over from landlines as the service with the highest number of complaints and that this change reflected the increasing penetration and breadth of mobile services. The overall increase in complaints from the previous year suggested that industry needed to do more to build consumer confidence in the telecommunications sector.

During 2009–10, the Department worked to improve the customer focus of the industry through the following activities:

• funding consumer advocacy and research
• reviewing consumer-related industry code processes
• supporting customers to opt-out of receiving telemarketing calls
• improving access for disadvantaged consumers.

Support for effective consumer advocacy and research

To improve the effectiveness of consumer representation, the Australian Government supported the establishment of the Australian Communications Consumer Action Network (ACCAN) which formally commenced operation on 1 July 2009.

In 2009–10, ACCAN was granted $1.8 million by the Department to enable it to represent telecommunications consumers as the peak body and undertake research and advocacy work on their behalf. In particular, ACCAN expresses the interests of consumers who face specific disadvantage in the access and use of modern telecommunications services.

Since its establishment, ACCAN has released almost thirty public documents including research reports on issues such as disability access to telecommunications services, a wide range of submissions to Government and industry bodies on regulatory changes and a series of consumer fact sheets including information on how consumers can avoid accruing high bills on 'smart' communication devices.

ACCAN was instrumental in canvassing and consolidating consumer views on what consumer protections should be included with the introduction of the National Broadband Network. ACCAN's input into the National Broadband Network Company Legislation and Access Regime has embedded the interests of consumers in the operation of Australia's future broadband arrangements.

Review of consumer-related industry code processes

In 2009–10, the Department conducted a review of the telecommunications consumer code development process. The review explored the inherent tension between consumers and the industry with respect to consumer protection issues. Following the review, on 20 April 2010, the Minister announced his intention to amend the Telecommunications Act 1997 to enable the ACMA to be more flexible and responsive to consumer issues.

Among the proposed amendments, the Minister proposed to have the power to direct the ACMA to develop an industry standard where considered necessary, rather than requiring that industry first develop a co-regulatory code.

In developing an industry standard, the ACMA will balance the interests of consumers with those of the industry. A standard will be directly enforceable by the ACMA and failure to comply with an industry standard will be subject to civil penalty provisions.

Mobile premium services

The Mobile Premium Services Industry Code came into effect on 1 July 2009 to address growing consumer concerns about mobile premium services. Since the introduction of the Code, consumer complaints to the TIO regarding mobile premium services have fallen significantly. The number of mobile premium complaint issues reported by TIO reduced from 28 809 to 2039 between the June 2009 and March 2010 quarters.

Supporting customers to opt-out of receiving telemarketing calls

Established in May 2007, the Do Not Call Register enables Australians to register their fixed or mobile telephone numbers used primarily for private or domestic purposes in order to opt-out of receiving unsolicited telemarketing calls.

Following a public consultation process, the Government introduced legislation to amend the Do Not Call Register Act 2006 on 24 November 2009. The Do Not Call Register Legislative Amendment Bill 2010 allowed Australian emergency services, government and fax numbers to be added to the Register and extends the period of registration from three to five years. The Bill was passed by Parliament on 13 May 2010 and commenced operation on 30 May 2010.

Improving access for disadvantaged consumers

During 2009–10, the Department undertook a feasibility study into the establishment of a disability equipment program independent of telecommunications carriers. The study examined key issues relating to the supply of specialised telecommunications equipment to people with disability, including the size and nature of the Australian market, current arrangements in Australia and other comparable countries, types of equipment and potential delivery models.

We released a discussion paper which received 35 submissions, conducted three focus groups with individuals with disability and held 29 face-to-face meetings with disability and consumer advocates, telecommunications carriers, industry representatives and other government agencies. The report has been submitted to the Minister for consideration.

The Department is responsible for policies relating to the National Relay Service (NRS) which provides people who are Deaf or have a hearing or speech impairment with comparable access to a telephone service. As the current NRS contract expires in 2011, we will be undertaking a review of the NRS, in consultation with the ACMA.

As part of services to assist people with disability, we are also considering options to address implementation issues with a SMS emergency call service for people who rely on teletypewriters so that they are able to contact emergency services when away from the home or place of work.

The Department takes an observer role at meetings of the Low Income Measures Assessment Committee (LIMAC), which is conducted by Telstra as the universal service provider. The LIMAC monitors and assesses the assistance package offered by Telstra to low-income consumers.

Cyber-safety

Online services and associated technologies have raised new issues of concern. These include cyber-safety risks to children, such as:

• cyber-bullying
• exposure to inappropriate content
• breaches of privacy
• 'grooming'
• internet addiction.

During 2009–10, we worked with relevant agencies including the ACMA, the Australian Federal Police (AFP), industry and child protection organisations to deliver the Australian Government's Cyber-safety Plan. The Plan consists of a range of cyber-safety measures to combat online threats and help parents and educators protect children from inappropriate material on the internet. These measures encompass education, international cooperation, research, law enforcement and internet service provider (ISP) filtering. A Consultative Working Group (CWG) and Youth Advisory Group (YAG) on
cyber-safety are also part of the Plan.

The CWG was established to provide cyber-safety advice to the Australian Government on priorities for action by government and industry. It met four times in 2009–10. The CWG has a broad membership including industry representatives such as Telstra, Google, Yahoo and community organisations such as the Alannah and Madeline Foundation, Bravehearts and Childwise. In 2009–10, the CWG provided advice to government on topics such as development of a Cyber-Safety Help Button and a user guide for social networking sites.

The CWG also advised on the development of repeatable survey instruments and methodology to obtain data from parents and/or guardians and teachers on children's cyber-safety issues. Following finalisation of the methodology, a national telephone survey of parents and guardians was undertaken in May 2010 and a national online teachers' survey commenced in June 2010. The surveys have been undertaken by Iris Research in cooperation with the Australian Council for Educational Research. Reports will be provided to the Department later in 2010.

For 2009–10, administered expenses of $2.1 million were incurred on the Department's cyber-safety activities, including support of free PC filters and implementation and management of the YAG on cyber-safety.

Youth Advisory Group (YAG)

The YAG on cyber-safety, established in 2009, provided advice to the Australian Government on cyber-safety issues (such as cyber-bullying, mobile phone safety, privacy and online computer games) from the perspective of young people. During 2009–10, the YAG consisted of 304 secondary students from 15 schools nationally. Over 12 200 posts on 865 topics were generated on the YAG online forum.

Five YAG representatives also delivered key cyber-safety messages to the Minister and the CWG on 1 September 2009 at a forum held at Parliament House. The Government's expansion of cyber-safety education, awareness-raising and counselling services was informed by feedback and advice provided by YAG members.

On 14 April 2010, the YAG was expanded to include approximately 500 primary and secondary students aged 8–17 years from 30 schools nationally. A Cyber-safety and YAG Summit was held on 8 June 2010 for members, parents and teachers to discuss government cyber-safety programs and initiatives.

For 2009–10, the program incurred administered expenses of $400 000.[9]

Internet Service Provider (ISP) filtering

As part of the Australian Government's commitment to examine the introduction of ISP-level filtering, a live ISP filtering pilot was conducted in 2009 to provide information on the effectiveness and efficiency of filters installed in 'real world' ISP networks. The pilot demonstrated that ISPs can effectively filter a specified list of URLs with 100 per cent accuracy and no noticeable impact on internet speed. The Enex TestLab report of findings from the ISP filtering pilot was released on 15 December 2009.

ISPs are being consulted on the implementation of the Government's ISP filtering policy, including through an online forum which was held from 12–23 April 2010. This involved a number of discussion threads relating to different implementation issues. Drafting has commenced on the Broadcasting Services Amendment (Internet Filtering of Refused Classification Content) Bill 2010.

However, prior to the introduction of the legislation a review is to be undertaken of the Refused Classification category under the National Classification Scheme to assess whether it appropriately reflects current community standards.

Cyber security

The internet is now an integral part of the daily routine of many Australians for keeping in touch with family and friends, studying, shopping or paying bills. While widespread use of the internet offers many benefits, it has exposed users to the distribution of malicious software for nefarious purposes such as fraud and theft.

The Australian Government's Cyber Security Strategy, launched in November 2009, reaffirmed the Department's responsibility to help to create an environment that supports Australians in taking full advantage of the opportunities of the digital economy, by ensuring that all Australians have the information, confidence and practical tools to protect themselves online.

The Cyber Security Education Package is a free interactive learning package for year 3 and year 9 students. In 2010, it won the Australian Interactive Media Industry Association (AIMIA) award for best children's interactive content. The Education Package has been refined and improved during the year and has been sent to 100 per cent of primary and secondary schools in Australia during 2009–10 and the Department is currently contacting schools to ascertain its level of use. The package is available free from
www.staysmartonline.gov.au or via CD-ROM.

The Government maintains a cyber security website: www.staysmartonline.gov.au. Between January and June 2010, the website received over 96 000 visitors and 16.2 million page views. This is a considerable increase from the same time in 2009 when the website received just 66 000 visitors and 2.3 million page views.

National Cyber Security Awareness Week (formerly National E-security Awareness Week) was held from 6 –11 June 2010. During the week, the Department partnered with around 150 industry, community, consumer and government organisations and the ISP Cyber Security Code of Practice was launched by the Minister. The public relations company engaged by the Department to coordinate the activities of the week estimate that the commercial value of partner contributions to online and in-store promotions was approximately $1.6 million and this helped to reach around four million Australians.

The Department undertook a survey from February to June 2010 to establish baseline data on the level of cyber security awareness across Australian internet users. The research has revealed that while many Australians recognise cyber security as an issue, most do not take all the required steps to appropriately protect themselves online. This survey will be repeated in 2010–11 to measure the impact of the Department's awareness raising initiatives.

For 2009–10, the program incurred administered expenses of $1.1 million.

Following the 2009 Victorian Bushfires, there was a renewed commitment between law enforcement and emergency service organisations to improve national radio communications interoperability. The Department, through the National Coordinating Committee for Government Radiocommunications, successfully developed a COAG-endorsed National Framework to Improve Government Radiocommunications Interoperability.

International activities and Asia–Pacific engagement

The Department administers Australia's membership of the Asia–Pacific Telecommunity (APT) and the associated member state contribution. In 2009–10, $256 000 was appropriated for membership of the APT.

Utilising the APT, the Asia–Pacific Economic Co-operation (APEC) Forum and capacity building work in Pacific Island countries, the Department promoted best practice regulation in the areas of cyber security, consumer protection and trade liberalisation.

APEC provided a forum to promote Australia's approach to implementing ISP cyber security codes of practice and awareness strategies. We led work to assist submarine cable owners to more quickly repair damaged cables by compiling information on the submarine cable repair regimes in APEC economies and points of contact in case of cable disruption and the Department organised international mobile roaming workshops within APEC and the APT, to promote competition and to provide regulators with strategies to prevent customers receiving excessively high bills.

Working with the World Bank and regulators from Pacific Island countries, we played a lead role in formulating the governance arrangements for Pacific Island countries ICT regulatory resource centre. This resource centre will allow Pacific Island countries to develop effective legislation to promote competition, develop good administrative procedures and join in the global effort to counter cyber threats.

Organisation for Economic Co-operation and Development (OECD)

The Department chairs the OECD's Working Party on Information Security and Privacy (WPISP). The WPISP's mandate covers issues such as cyber security and safety, identity management and privacy. This group has examined the role which ISPs can play in enhancing the security of the internet by assisting their customers to combat problems with malicious software.

We facilitated the cooperation between the WPISP and the APEC Telecommunications and Information Working Group. The joint APEC-OECD project developed a report outlining best practices for preventing children being exposed to harmful online material.

Postal services

Australia Post is a fully government-owned Business Enterprise, which reports independently of the Department. The Minister for Broadband, Communications and the Digital Economy is a Shareholder Minister responsible for the regulation of Australia Post. To assist the Minister in this regard, the Department provides advice on Australia Post's activities, operations and future directions. The Minister for Finance and Deregulation is also a Shareholder Minister.

Like postal services in many countries, Australia Post faces a range of business challenges. In Australia, fewer letters are being delivered to an ever-increasing number of households, businesses and other delivery points. Australia Post estimates that letter volumes are declining at a rate of some five per cent per annum while the number of delivery points increases by around 200 000 per annum. The Department is exploring longer term strategic directions for Australia Post.

During the year, we also provided advice to the Minister on corporate and governance issues for Australia Post such as the price notification for the basic postage rate and appointment of directors to the Board. The price of basic letter stamps increased from 55 cents to 60 cents on 28 June 2010.

Back to top

Broadcasting and digital switchover

The Broadcasting and Digital Switchover Group supports access to high-quality and diverse broadcasting services that deliver content consistent with community expectations and needs through:

• coordinating the switchover to digital television, with the switchover completed by the end of 2013
• providing advice on ABC and SBS funding matters and assisting in the processes of ABC and SBS Board appointments
• providing advice on the broadcasting regulatory environment, including the operation of media ownership laws, broadcasting content issues, anti-siphoning, digital radio and media access
• administering initiatives to improve television reception and support community, regional and remote broadcasters.

Switchover to digital televison

The switchover to digital television, which is happening across the world, offers significant benefits to viewers: more TV channels, improved pictures, including widescreen, and better sound quality. The 'digital dividend' of spectrum freed-up by switching off the analog transmission network can also be made available for alternate uses.

The Department's Digital Switchover Taskforce is implementing a region by region approach to switchover, with the process to be completed by the end of 2013. For 2009–10, the program incurred administered expenses of $23.8 million.

The first switchover occurred in the Mildura/Sunraysia region, when the analog television signals were switched off on 30 June 2010. Following an extensive communication campaign, the Taskforce with the support of the ACMA and other stakeholders, worked in the Mildura/Sunraysia area in the weeks leading up to the switchover, to provide information sessions to assist the local community with final preparations for Digital Switchover. Taskforce officers also provided advice to those viewers having difficulties in achieving reliable digital reception. This included detailed guides to accessing new terrestrial digital services at Ouyen, Walpeup (serving Underbool) and Robinvale, and the new satellite service, funded by the Government.

We assessed the effectiveness of the switchover to digital television through the Digital Tracker by monitoring the following indicators for each switchover region on a quarterly basis:

• awareness of digital switchover (awareness)
• understanding of how to get ready for digital television (understanding)
• attitude to the digital switchover (attitude)
• intention to convert main television set to digital (intention)
• conversion of main television set to receive digital television (conversion)
• satisfaction with digital television conversion (satisfaction)

Every quarter, around 10 000 households—with a working television set used in the last six months and living in private dwellings—are interviewed via telephone. Trends against the six key indicators are set out in the graph below.

Figure 2.4 The Digital Tracker: Measuring digital switchover

Figure 2.4 The Digital Tracker: Measuring digital switchover - text version

During 2009–10, there was significant movement in all of the six switchover measures. At the beginning of the 2009–10 financial year (Quarter 3, 2009), awareness was at 91 per cent and conversion at 56 per cent. By the end of the financial year (Quarter 2, 2010), awareness was tracking at 95 per cent and conversion had reached 74 per cent.

The switchover areas in regional South Australia have seen very significant increases in conversion from 54 per cent in Quarter 3, 2009 to 77 per cent in Quarter 2, 2010 and are well on track for switchover on 15 December 2010.

Raising public awareness and understanding of digital switchover

The communication strategy for digital switchover combined a multi-regional advertising campaign which ran at key advertising periods (March/April, June, November/December 2009, January 2010 and March/April 2010) as well as localised advertising in each switchover region.

The localised advertising campaign commenced in Mildura/Sunraysia on 3 January 2010, six months before switch off.

In support of local advertising in Mildura, a public relations consultancy supported technical road shows, media briefings, media launches, a naming competition for the mascot and attended community events. They also worked closely with the Department's full-time Digital Switchover Liaison Officer in the area.

Local advertising in areas of regional South Australia and Broken Hill commenced in March 2010, nine months prior to switchover.

VAST

On 5 January 2010, the Minister announced that the Australian Government will fund a new digital satellite service—the Viewer Access Satellite Television (VAST) service—so that viewers who are living in areas where broadcasters have not built transmitters, or where broadcasters' signals do not reach, will not be denied access to digital television.

In the 2010–11 Budget, the Government committed $375.4 million over 12 years to fund the service, to provide a household satellite subsidy scheme administered by the Department, and for related activities. The service carries the full suite of commercial and national free-to-air television channels in all regions of Australia. This includes channels delivering Seven, Nine and Ten network programs, and digital channels including ONE HD, GO!, and 7TWO. State-based ABC and SBS services, including ABC2 and ABC3, SBSTwo and the new ABC 24 hour news channel will also be carried on the satellite. Local regional commercial news bulletins will be available via a dedicated news channel or, in Western Australia, as part of the main service.

On 14 March 2010, the Minister announced an agreement between the Government and broadcasters Southern Cross Media and Imparja Television to fund the Eastern parts of the service. The agreement provides clear timeframes and milestones to ensure delivery and maintenance of the VAST service to viewers in Eastern Australia. The value of this contract is $82.8 million (inclusive of GST) over 10 years and three months. An interim version of the service was available to Mildura viewers prior to switchover in that region.

Negotiations on a funding agreement for the satellite service for Western Australian viewers commenced with the remote area commercial television licensees in Western Australia (PRIME and WIN Television). Further information about the introduction of the new service for these viewers will be made available on the Digital Ready website at
www.digitalready.gov.au when arrangements have been finalised.

On 29 June 2010, the Broadcasting Legislation Amendment (Digital Television) Act 2010 received Royal Assent. The Act establishes the legislative framework for the commercial broadcasting digital television services delivered as part of the new VAST service.

The $375.4 million announced for the VAST service includes $99.1 million to the end of 2013 to provide a subsidy for those viewers in communities reliant on community run self-help towers who will need to access the new satellite service because of the closure of the self-help sites. The satellite subsidy will be a minimum of $400 per household, with higher amounts of $550 for defined 'very remote area' households and $700 for defined 'far north tropical' households. In addition to these subsidy amounts, households in identified remote Indigenous communities may be eligible for an additional $280 worth of assistance. Approximately 130 000 households in over 600 communities, in mostly regional and remote areas, may be eligible for this subsidy.

Assistance to vulnerable households

The Digital Switchover Household Assistance Scheme supplies, installs and demonstrates a high definition set-top box at no cost to eligible households. Eligible households are those who own a functioning television, do not already have access to digital TV and where at least one resident is in receipt of a maximum rate:

• Age Pension
• Disability Support Pension
• Carer Payment
• Department of Veterans' Affairs (DVA) Service Pension
• DVA Income Support Supplement Payment

Eligible households are able to opt into the Scheme up to one month after switchover in their area. The Scheme commenced in the Mildura licence area on 18 January 2010 with the dispatch of letters to over 7000 potentially eligible households in the Mildura/Sunraysia region inviting them to contact Centrelink to opt into the Scheme.

Following an open tender process, Hills Industries was selected as the successful contractor for the Mildura/Sunraysia region. Hills Industries, in association with TechLife, and SkyBridge (Australia) Pty Ltd were announced as the service contractors for the regional South Australian and Broken Hill areas.

As at 30 June 2010, over 2562 households have been assisted by the Scheme to convert to digital TV. This represents 36 per cent of all households that were potentially eligible for the scheme prior to the switchover on 30 June 2010.

Working with suppliers and retailers of digital equipment

A series of labels for televisions and set-top boxes and digital TV recorders have been developed in consultation with industry peak bodies to help consumers identify which product is digital ready or capable of being digital ready with the purchase of a digital ready product. Under the Digital Switchover Labelling Scheme, licensed suppliers agree to apply the appropriate government label to all compliant television receivers they supply to the Australian market.

The Digital Switchover Labelling Scheme has 35 participating suppliers and 576 digital ready qualified products available for consumers to choose from in the market place. Consumers can access qualified products via a searchable database launched on the Digital Ready website. A product audit was conducted to test compliance against the Australian Standard for digital television receivers and will be an ongoing feature of the program.

The Retail Advisor Scheme was launched in December 2009 to identify retail staff that are able to advise consumers about the options available for switching to digital television, particularly in relation to the labelling Scheme. There are 1343 registered Digital Advisors in retail stores throughout Australia, and 1157 licensed retailers participating in the Scheme.

The Antenna Installer Endorsement Scheme was developed in consultation with industry and launched in December 2009 to identify skilled antenna installers to help consumers switch to digital television. There are 254 Endorsed Antenna Installers with a further 1276 registered to participate.

Regional equalisation plan

The Regional Equalisation Plan provides broadcasters with a 50 per cent subsidy to convert their terrestrial transmission facilities to digital and operate them for a period of eight years. Assistance is provided by licence area as capped annual rebates against broadcaster's licence fees supplemented by a grants component, where necessary, to achieve total agreed assistance under the Plan. Licence fee rebates are administered by the ACMA.

Assistance under the Plan continued to be provided in 2009–10 to regional broadcasters. In addition, the first tranche of assistance was provided to remote broadcasters in Western Australia.

In 2009–10, administered expenses of $1.3 million in the form of supplementary grants were provided to broadcasters operating in two regional markets:

• $0.3 million to two small regional markets (Broken Hill, New South Wales—$70 000 and Riverland, SA—$230 000).
• $1 million to markets in regional and remote Western Australia (WIN Television WA—$550 000 and Prime's four holdings in WA, totalling $450 000).

Strong and independent national broadcasters

The Department provides policy advice relating to the national broadcasters, particularly regarding funding, accountability and transmission issues. The Department's staff work closely with the national broadcasters and deal with correspondence and queries from Parliament regarding their activities.

During 2009–10, the Minister approved funding for the ABC and SBS to rollout digital television services at a further 14 sites (12 and two respectively), so that more Australians have access to ABC and SBS digital television services. More Australians also have access to ABC NewsRadio due to additional services commencing in Lithgow and Tamworth in NSW during 2009–10 from funding approved during 2008–09.[10]

The Department has provided advice in support of the Government's reform agenda for the national broadcasters including the implementation of the merit selection process for the appointment of non-executive directors to the ABC and SBS Boards, chaired by the former Secretary of the Department of Defence, Mr Ric Smith AO, PSM. In 2009–10, the SBS Board appointed a new Chairman and two new members and one re-appointment each were made to the ABC and SBS Boards.

Legislation that amends the Australian Broadcasting Corporation Act 1983 and Special Broadcasting Service Act 1991 to set the new Board appointment process in law has been introduced into Parliament.

Digital radio

Digital radio services officially commenced on 1 July 2009 in the five mainland state capitals—Adelaide, Brisbane, Melbourne, Perth and Sydney—providing an additional range of services to listeners in these cities. The radio broadcasting industry held a promotional launch for digital radio on 6 August 2009.

All commercial AM and FM, ABC AM and FM, and SBS services in the five cities are simulcast on digital radio. In addition, there are a number of digital-only commercial services, two SBS 'time-shift' services, two digital-only SBS services and four digital-only ABC services. These services operate alongside rather than replace existing analog AM and FM services.

Wider area community radio broadcasters are expected to commence digital radio services from late 2010. Commercial Radio Australia and SBS have announced a trial for digital radio in Canberra that will commence in July 2010. Digital radio trials are being planned for other regional radio licence areas in 2010–11.

Advice to the Minister

During 2009–10, the Department provided advice to the Minister on a wide range of broadcasting issues, including developments in the commercial, national and community television and radio sectors; compliance with relevant codes; ownership and control changes; the introduction of new digital broadcasting technologies; and the general operation of the regulatory frameworks applicable to broadcasting.

The accessibility of electronic media for people with a hearing or vision impairment is a key issue in the 21st century. In 2009–10, the Department followed up its 2008 discussion paper and consultation with a report, which set out ways to improve access to electronic media by the hearing and vision-impaired and sought Australia's views. A decision is expected by the Government in the new financial year.

In recent years, there have been disputes between some sporting and media organisations about access for journalists to sporting grounds to report on events. In 2009, a Senate Committee investigated the issue, making several recommendations including that stakeholders should negotiate to allow all bona fide journalists access to sporting events. The Minister asked Mr Graeme Samuel AC, Chair of the Australian Competition and Consumer Commission (ACCC), to host a series of roundtables between major sporting and media organisations to discuss the issues and come to a negotiated solution.

We worked with Mr Samuel in preparing the new Code of Practice for Sports News Reporting (Text, Photography and Data), which after several months of negotiation was signed by major media and sporting organisations at a meeting with the Minister on 30 March 2010.

Anti-siphoning

On 20 August 2009, the Minister released a discussion paper, Sport on Television: A Review of the Anti-siphoning Scheme in the Contemporary Digital Environment, seeking comment on a range of matters relating to the scheme. Over 330 submissions were received in response to the paper demonstrating the strong interest of Australians in sport on television.

Television towers

Funding of $850 000 was provided in the 2008–09 Budget to meet three election commitments to improve digital television reception in:

• Broadford in Victoria
• Currie on King Island, Tasmania (the Currie commitment also involved improving reception of the ABC's local radio service)
• the Ingle Farm to Craigmore area along the Para Escarpment in outer metropolitan Adelaide, South Australia.

In 2009–10, actual funding expended was $723 000.

The Broadford facility was commissioned in June 2009.

The Currie facility, which was commissioned in April 2010, currently retransmits the ABC and SBS digital television services, and the ABC's Northern Tasmania Local Radio service. The retransmission facility is capable of receiving and retransmitting commercial broadcaster signals. However, the commercial broadcasters may not commence their digital television services on King Island until the digital switchover window for Tasmania in 2013.

The Craigmore/Hillbank broadcast facility was commissioned during June 2010. While targeting the suburbs of Craigmore and Hillbank, the facility is also expected to provide adequate signals to a broader area of the Para Escarpment.

Community broadcasting

The Department provided policy advice and administered funding via funding deeds to the Community Broadcasting Foundation and Radio for the Print Handicapped Australia to support Australia's diverse and extensive community broadcasting sector.

The Community Broadcasting Foundation received $14 million in 2009–10 in funding to apply to the maintenance and development of community broadcasting. Grants were distributed to the sector supporting broadcasting for the benefit of the general community, ethnic radio, Indigenous Australians and print handicapped. In addition, Radio for the Print Handicapped received $453 000 under a separate funding deed for the transmission of radio services for the print handicapped.

In 2009–10, the Government allocated spectrum and $2.6 million in funding support for the introduction of digital community television services based in Sydney, Melbourne, Brisbane, Adelaide and Perth to ensure programs are accessible to audiences.

National Transmission Network Residual Funding Pool

The National Transmission Network Residual Funding Pool provided funding assistance towards transmission costs incurred by three remote commercial broadcasters (Golden West Network, Imparja TV and North West Radio). These grants ensured that commercial broadcasting services, provided through Golden West Network and North West Radio, continued to be made available for households in certain remote areas of Western Australia.

For 2009–10, administered expenses of $120 000 were incurred against this program. The Department did not provide funding to Imparja TV in 2009–10 as Imparja was unable to satisfy all reporting requirements. The services which Imparja TV provides have continued throughout the period.

Back to top

Financial performance

This section should be read in conjunction with the Department's audited financial statements for 2009–10, which appear in the section of the Annual Report entitled 'Financial Statements'.

Overview of the Department's finances

Parliament provides the Department with two types of funding: departmental and administered. Departmental funds are used to produce goods and services (outputs) at a quantity, quality and price endorsed by the Government. The Department administers funds, assets and liabilities on behalf of the Australian Government, which controls how the Department uses them and requires the Department to account for them separately.

Departmental finances

The Department's net cost of services for 2009–10 was $148.1 million, with revenue from Government of $153.8 million, resulting in an operating surplus of $5.7 million.

Total income increased by $37.6 million in 2009–10, reflecting the provision of additional funding by the Australian Government to the Department for activities associated with the implementation of the National Broadband Network, in particular the National Broadband Network Implementation Study, and the ramp up of activities associated with the switchover to digital only television by 31 December 2013.

Table 2.2 provides a summary of the Department's income statement and net asset position.

Table 2.2 Summary of departmental financial performance and position

	2005-06 $m	2006-07 $m	2007-08 $m	2008-09 $m	2009-10 $m	Change last year
Revenue from Government	119.8	145.6	111.2	117.1	153.8	31.3%
Other Revenue	8.9	8.8	4.4	1.4	2.0	42.9%
Gains	0.4	0.4	0.6	0.5	0.8	60.0%
Total Income	129.1	154.7	116.2	119.0	156.6	31.6%
Employee and supplier expenses	108.2	125.2	123.4	108.7	143.9	32.4%
Depreciation	3.4	3.8	4.2	5.9	5.8	1.7%
Other Expenses	2.9	1.4	0.7	0.5	1.2	140.0%
Total Expenses	114.6	130.4	128.3	115.0	150.9	31.2%
Operating Result (Loss)	14.5	24.4	(12.1)	4.0	5.7	n/a
Financial Assets	73.8	103.4	77.2	86.5	80.0	7.5%
Non-financial assets	56.4	64.2	16.9	13.3	19.5	46.6%
Liabilities	27.5	32.7	26.7	26.8	38.6	44.0%
Net assets	102.6	134.9	67.5	73.0	60.9	16.6%

The movement in the Department's net assets reflects the impact of Operation Sunlight, which saw the return of $20.9 million in appropriation receivable associated with future non-financial asset purchases. This was offset, in part, by the operating surplus and an increase in investment by the Department in non-financial assets.

Administered finances

Administered income decreased by $342 million compared to 2008–09, reflecting:

• a decrease in interest revenue of $85.8 million, reflecting the closure of the Communications Fund on 1 January 2009
• a decrease of $255.9 million in dividends received from Australia Post.

Administered expenses increased by $75.8 million compared to 2008–09, due to an increase in payments made to ABC and SBS reflecting the outcome of the 2008–09 Triennial Review of funding and increases in the Digital Television Switchover program.

Administered financial assets remained broadly unchanged, with a small fall in the valuation of Australia Post (which in 2009-10 is valued on a discounted cash flow basis) being, in the main, offset by an increase in the Commonwealth's investment in NBN Co Limited.

Administered non-financial assets increased by $44.7 million under the $250 million RBBP, for the initial construction stages of the fibre optic transmission backbone infrastructure to a number of regional centres where there is a lack of competitive backhaul services.

Administered liabilities increased by $17.5 million due to an increase in supplier payables, reflecting a timing difference associated with payments for assets under construction under the RBBP.

Table 2.3 Summary of administered financial performance and position

	2005-06 $m	2006-07 $m	2007-08 $m	2008-09 $m	2009-10 $m	Change last year
Interest	86.3	131.8	163.3	86.4	0.6	99.3%
Dividends	2,861.0	1,181.9	306.3	427.8	171.9	59.8%
Other revenue	18.5	6.6	7.1	0.3	1.0	233.3%
Gains	0.0	16,778.8	0.4	1.0	0.0	100.0%
Total income	2,965.7	18,099.1	477.1	515.6	173.5	66.4%
Grants	358.4	271.9	245.3	83.1	74.2	10.7%
Subsidies	225.9	168.7	86.1	84.8	79.3	6.5%
Other expenses	52.8	31.1	27.5	17.8	36.3	103.9%
Payments to CAC Bodies	0.0	0.0	0.0	1,049.9	1,121.5	6.8%
Total expenses	637.2	471.7	358.8	1,235.5	1,311.3	6.1%
Financial assets	34,132.7	11,758.6	7,116.2	3,637.4	3,593.5	1.2%
Non-financial assets	134.0	144.0	2.5	3.1	47.7	1438.7%
Liabilities	64.1	23.0	21.5	22.6	40.1	77.4%
Net assets	34,202.6	11,879.6	7,097.1	3,617.9	3,601.1	0.5%

Back to top

[1] Australian Bureau of Statistics, Summary of IT Use and Innovation in Australian Business 2008–09, Cat. No. 8166.0, 24 June 2010, see: www.abs.gov.au/ausstats/abs@.nsf/mf/8166.0

[2]downloaded from www.abs.gov.au/AUSSTATS/abs@.nsf/Latestproducts/3039B1BD9F3F0ED4CA25774B001909E4?opendocument

[3] OECD Broadband Portal, comparative broadband penetration rankings for December 2009, www.oecd.org/sti/ict/broadband, table 1d.

[4] See www.oecd.org/document/54/0,3343,en_2649_34225_38690102_1_1_1_1,00.html#prices, table 4e.

[5] See www.oecd.org/dataoecd/32/27/43922088.xls

[6] See www.oecd.org/dataoecd/33/3/43922143.xls

[7] No eligible communities are located in Victoria or the Australian Capital Territory.

[8] Registered providers were required to achieve at least 60 per cent of the nominated peak speed of their services at least 75 per cent of the time, according to the Department's independent testing.

[9] An additional $170 000 was transferred from the Youth Advisory Group program to the Indigenous Communications Program.

[10] Administered expenses of $4560 (GST exclusive) were also paid to the national broadcasters under the Digital Interference Scheme which closed in 2009–10.